May 17, 2012

Buyers Fear They Could Lose Out On A Deal

The Sun Chronicle reports on Massachusetts. “Now that there are signs of recovery in the housing market, the hand-wringing has resumed over the shortage of homes in the state. Long-standing anti-growth policies of towns have kept the housing supply chronically low in comparison to the demand, says Paul McMorrow, an editor at CommonWealth Magazine. This drives up both home prices and rents. Let’s admit the obvious, though it often seems politically incorrect. The people who can afford the homes in the suburbs have good jobs and are high achievers.”

“They are richer, healthier, fitter, smarter and probably prettier than people who live elsewhere. Such is life. The admitted downside is that many young families can only aspire to live in the suburbs. Sadly, some decide they have no alternative but to leave the state.”

The MetroWest Daily News in Massachusetts. “According to the Re/Max of New England Monthly Housing Report for March, the region is experiencing an increase in home sales, a decrease in inventory and stabilization in median home prices. In Wayland, where home sales rose from 10 in March 2011 to 15 in March 2012, the median price increased 8.5 percent, to $540,000. In Hopkinton, where home sales increased 11 percent, the median price increased 6.58 percent to $437,000.”

“Price is a carefully watched statistic. After all, real estate is an investment and who doesn’t want their investment to become more valuable?”

CBS Boston in Massachusetts. “The state’s housing recovery is proving especially kind to sellers of high-end homes, a Boston Business Journal analysis indicates. Sales of homes that fetched $2 million or more were up 27 percent over the same period. ‘Buyers are coming off the sidelines with more speed as they see inventory dropping and fear they could lose out on a deal,’ said Kevin Ahearn, president of Otis & Ahearn. ‘The combination of historically low interest rates and prices that have bottomed and are moving up have convinced buyers that this is the time to buy to get the best opportunity on price.’”

“The median price for a single-family home sold during the first four months of 2012 was $269,000 — down 2 percent from the median during the same months in 2011. The median price for a $2 million-plus home sold during the first four months of 2012 was $2.6 million — down 4 percent from the average during the same months in 2011.”

“Beth Dickerson, an agent at Gibson Sotheby’s International Realty, said high-end properties tend to sell at a discount because they are priced too high as most sellers are convinced their homes are special and will command a larger number. Unlike some other major cities, the Hub has been unable to absorb higher prices, she said. ‘Typically,’ she added, ‘buyers make a bid low and meet somewhere in the middle. But this is nothing new, no one pays asking prices for these over $5 million properties.’”

WBUR in Massachusetts. “Crowded open houses. Multiple offers. Selling above the asking price. It may sound like 2004, but we’re talking 2012. Home sales in Jamaica Plain are coming back to life. Randal Engelmann is the Realtor selling this townhouse. Two stories, three bedrooms, one-and-a-half baths. The listing price is $419,000. He and the seller started taking bids on Monday. Within two hours, the seller accepted the highest of four offers – all above asking price. ‘Multiple offers on many, many properties,’ Englemann said. ‘I sold the unit two doors down from here — and we had 11 offers on that. That went for about 5 percent over the asking price, so good for the seller!’”

“Sheryl Howard and her partner started looking for a place a few months ago. ‘Because we’re first-time buyers, and we both like to mull over big purchases, we didn’t really understand how quickly you had to ask and put in an offer,’ Howard said.”

The New York Times. “Three months ago, when Wei Min Tan, a broker at Rutenberg Realty, negotiated a deal for a new $3 million three-bedroom condominium at the Aldyn on the Upper West Side, he was able to save his buyers $95,000 in transfer taxes and other costs, as well as to finagle a free storage space. But now, Mr. Tan said: ‘I don’t know if I could get the same deal. Literally a month ago, the market turned, and there is now a feeding frenzy.’”

“Lack of inventory is largely responsible for the trend. At the same time, the pace of signed deals in Manhattan is the highest it has been since UrbanDigs began collecting data in 2008, said Noah Rosenblatt, the site’s founder. This winter, Isabelle Lambotte of Princeton, N.J., and her family were looking for an investment property and pied-à-terre in New York City. They settled on Chelsea, specifically a new condominium conversion at 422 West 20th Street.

“She bought a two-bedroom apartment for more than the asking price. She declined to reveal the amount she had paid because the deal has not closed, but two-bedrooms are listed for $1.075 million to $2.095 million, according to the building Web site. ‘There were so many other people interested, it was crazy, with everyone placing offers,’ Ms. Lambotte said, ’so we wondered if the unit would even be available. We were told there was no flexibility, and honestly, we didn’t even think about negotiating.’”

From UPI. “Standard and Poor’s Rating Services’ estimates that the time it will take to clear the supply of distressed homes, or the shadow inventory, on the U.S. market is now 46 months. For the city with the greatest estimate of the time it will take to clear its inventory of foreclosures and short sales, New York City, it will take 202 months, or nearly 17 years.”

From MarketWatch. “The New York metro area’s serious delinquency rate rose to 11.4% in December, according to Crain’s New York. That rate is the share of loans in foreclosure plus the share of loans delinquent 90 or more days. The rate for the 100 largest metro areas was 9.7% for December. As of March, based on the number of foreclosures, it will take 69 years for New York state’s seriously delinquent mortgages to clear.”

The New Jersey Spotlight. “Nationwide, foreclosure rates were flat in March, although the inventory of 1.4 million homes was down slightly from a year ago, according to CoreLogic. But New Jersey ranked second — behind only Florida — because of new cases piling up on top of the backlog. ‘In New Jersey, we’re not even at the top yet’ of the surge in foreclosures, said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action. ‘What’s coming is larger than anyone has imagined.’”

The Record in New Jersey. “The house on Edel Avenue is just one of thousands of vacant homes left by the housing bust all across North Jersey. Neighbors say they’re discouraged and disheartened by the sight of these neglected homes, which can remain empty for years while the foreclosure process grinds slowly forward. ‘It just detracts from the whole neighborhood,’ said Maywood homeowner Joe Leichtnam. ‘It definitely has an impact on the value of the homes in the area.’”

“It now takes, on average, more than 2½ years for lenders to go through the legal process to evict New Jersey homeowners who can’t pay their mortgages. The New Jersey foreclosure pipeline came to a near-halt in 2011 over sloppy paperwork by lenders — called ‘robo-signing’ because lender representatives allegedly signed documents without checking them.”

“The blight has not hit just lower- and middle-income areas. On McCain Court in Closter, for example, an empty McMansion sits in a cul-de-sac of half a dozen similar houses. The owner paid $929,000 for the home in 2000, but lender Keystone Nazareth Bank and Trust filed to foreclose in July 2008, according to public records.”

“Today, the house sits with expensive but overgrown landscaping, a knocked-over mailbox and signs of damage in a high corner where the side wall meets the roof. There’s a notice on the door from United Water, dating to December, warning that the water’s about to be turned off because of an unpaid bill of $1,367.”

“Laura and Jim Jackson in Bloomingdale worry that living next to a vacant home lowers the value of the ranch that they’ve lovingly renovated. ‘It’s sad to look at, to tell you the truth,’ said Jim Jackson. His wife went out to do some yard work the other day, but then quit in disgust as she looked at the neighboring property. ‘Why do I bother?’ she asked.”

The Press of Atlantic City in New Jersey. “Absecon Gardens is expected to be a key component of the city’s efforts to revitalize its downtown. But before the large condominium complex could open, it was stuck in a controversial statewide issue that involves allowing developers to let anyone live in homes previously zoned only for people age 55 and older. The project’s developer hopes to begin selling 48 units by July, but residents who want to keep the age restriction are continuing their legal battle.”

“Absecon Gardens was originally zoned for 55-and-older housing — a popular option for many area developers in the past decade. But after the real estate market collapsed, the market dried up and it became difficult to sell them.”

“For some properties, the issue is more about broadening the market or not being built at all. Jack Plackter, a lawyer representing the Visions at the Shore development, said he would appeal before the city’s Zoning Board at the May 15 meeting to propose 400 units of mostly two-bedroom apartments. Plackter said they were seeking a waiver to no longer require senior housing at the site. The original developer built 42 senior units and sold 17 of them to seniors, he said. The new owner, Amboy Bank, is renting the remaining units, he said. The bank seeks this approval and then will try to sell the plan to another developer, he said.”

“Plackter said he sympathized with the seniors who already bought homes there but said the complex might not get built if the zoning remained the same. He said they were trying to work out a solution with the current residents. ‘We tried to see if it would be feasible to continue the senior housing, but we’ve found there is no desire for it in the area,’ he said. ‘We feel bad for them. It’s a shame.’”

“Resident Vern Roswell, 71, said those who live at Visions wanted to keep the development age-restricted. ‘If they bring in rental units, we won’t be able to sell our homes to anybody,’ he said.”

Bits Bucket for May 17, 2012

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